Drastically higher minimums for liability insurance would be better, but politically unpopular for the same reason that higher taxes would be unpopular.
But if it costs a lot, people would rather just take the risk and then be on the hook for way more money than they can pay. Which is why paying for insurance is legally mandated in some cases.
Michigan's unlimited PIP is lifetime (so no out of pocket maximum to cover in year 2 of your catastrophe). There's rules about what is covered of course, but the financial side of it is a bit simpler.
My premium for the year is less than 1 month of health insurance, it's pretty cheap.
Except they operate in a competitive and fairly transparent market, so it’s actually not like that at all. Insurance rates are very tuned for a variety of risk profiles to capture the specific risk segments the insurer wants to take on and they compete for price in that space. If you don’t like what it costs from A you might be able to find it cheaper with B, and B has incentive to do that.
Insurance rates should be set with actuarial data and not with political agendas. It's not insurance companies duties to set our action for societal purposes. You really do not want to give them any more power than they already have in our lives. See healthcare in the USA. That's why we have governments.
The government requiring people to purchase higher liability coverage does not mean the government is setting the prices for the liability insurance. Actuaries would still be doing the same job.
